Stocks and Trading Thread - Channeling your inner Mono

[Admiral Yi]

I just received my first ever bond coupon! 

[DGuller]

Still kicking myself daily for selling 100 shares at 110$ back in 08.

That's like a $40,000 mistake.  Yikes.

[MadImmortalMan]

Still kicking myself daily for selling 100 shares at 110$ back in 08.

That's like a $40,000 mistake.  Yikes.

It's only opportunity cost. Don't discourage him. 

Jon Najarian @optionmonster

Even with long-term view like Tilson, you can own AAPL LEAPS and sell calls into it to generate fantastic returns

He's one of the goatee guys on CNBC. Leaps are very long-term options. I think the strategy he's talking about is to buy calls on Apple that expire a very long time from now, say Jan 2014, and then sell calls every week or month against that position. I assume the faster deteriorating time premium on the shorter-term sold calls is where the profit is in this strategy.

Let's see--AAPL Jan 2014 490 (currently in the money) calls cost 91.45. So I'd have to buy one of those for $9145.00. Total cost = x100.

Then I sell, say the monthly calls. I want to stay somewhat out of the money so I pick Feb 2012 calls at 505. Those cost $5.30 right now. So I pocket $530 this month. Repeat every month until Jan 2014. Five hundred bucks a month for 23 months. I would likely have to make adjustments to my underlying leap to account for changes in AAPL's market price and to keep my leap far enough in the future to keep its value, but the income would likely be roughly the same.

A little more than double the initial investment in almost two years. The weeklies would bring in maybe 200 a week from the sold calls. That would triple the investment. Interesting exercise, anyway.

[Admiral Yi]

Unless it gets called the first month, in which case you're out eight and a half large.

Something has been pushing up my small cap ETF the last week or so.

[Tamas]

Unless it gets called the first month, in which case you're out eight and a half large.

So I understood it correctly. Is this supposed to be along the lines that if you keep sucking up some pretty bad losses on keeping selling monthlies on continued Apple strength, you will make an absolute killing in 2014 covering all those earlier losses?

[Admiral Yi]

So I understood it correctly. Is this supposed to be along the lines that if you keep sucking up some pretty bad losses on keeping selling monthlies on continued Apple strength, you will make an absolute killing in 2014 covering all those earlier losses?

The way I understand it you're buying the long dated call option to cover the otherwise naked calls you're selling short term. 

[MadImmortalMan]

So I understood it correctly. Is this supposed to be along the lines that if you keep sucking up some pretty bad losses on keeping selling monthlies on continued Apple strength, you will make an absolute killing in 2014 covering all those earlier losses?

The way I understand it you're buying the long dated call option to cover the otherwise naked calls you're selling short term.

Yes, you got it.

I assume that in order to manage risk with this strategy, you would have to make sure you're swapping the long call out for one with a better strike when it needs to be---as well as being careful to not get caught short an in the money call on the short-term side (you can always buy it back if the price gets close, but that cuts into your profits). You would get the chance to pick a different strike each month or week on the short side.

[mongers]

So, does everyone win ?

[Phillip V]

How much more?

[Admiral Yi]

Wallie World is taking a beating today.

MIM: never wrong? 

[Phillip V]

Give me a crash.

[Phillip V]

Apple is sitting on $100 billion in cash. Give us a dividend.


http://blogs.wsj.com/marketbeat/2012/02/23/an-apple-dividend-dont-count-on-it-just-yet/

[Grey Fox]

Apple is sitting on $100 billion in cash. Give us a dividend.


http://blogs.wsj.com/marketbeat/2012/02/23/an-apple-dividend-dont-count-on-it-just-yet/

Dividend? Obama should go commie on their asses & seize it.

[MadImmortalMan]

No shit. Apple's not some gay techy-fad startup anymore. Well, they're not a startup. 



If I were appointed CEO of Apple, the first thing I would do is begin paying a dividend. It's baffling that they haven't already.

[MadImmortalMan]

Greece's thing is a credit event (maybe). I just bought a big pile of weekly puts on SPY that expire in an hour and a half.